Open Access Open Access  Restricted Access Subscription or Fee Access
Total views : 961

Merger, Shareholder Value and Corporate Governance an Empirical Study of Mergers & Acquisitions in India

Affiliations

  • Professor, Department of Commerce, University of North Bengal, Darjeeling, India

DOI: 10.33516/maj.v54i2.46-52p

Abstract


Either for enjoying synergies resulting from enhanced scale of operation or for consolidating market control, mergers and acquisitions have become popular practice in corporate sector in India. However, there is no conclusive empirical evidence that M&As can really enhance return and shareholders’ wealth. This paper presents the findings of a study of thirty six mergers consummated in India. The results obtained from statistical analysis support that M&As are effective in enhancing shareholders’ wealth and value of the firm. However, the space of value addition appears much weaker in post-merger period compared to pre-merger period. It is also observed that the firms saddled with very low efficiency in pre-merger period turn value destroyers in the immediate first year after acquisition.

Keywords

No keywords

Full Text:

Purchase Issue (PDF views: 1)

References


  • Andre, P. M. Kooli and J. L’ Her, (2004): The Long-run Performance of Mergers and Acquisitions: Evidence from the Canadian Stock Market, Financial Management, 33(4), pp.2743

  • Bradley, M, Desai, A and Kim E H (1988): Synergistic Gains from Corporate Acquisitions and their Divisions between the Stockholders of Target and Acquiring Firm, Journal of Financial Economics, Vol.21, pp.3-40

  • Choi, J. and J. Russell (2004): “Economic Gains around Mergers and Acquisitions in the Construction Industry of the United States of America”, Canadian Journal of Civil Engineering, 31 (3), pp. 513-525.

  • Chauhan Pratapsinh (2011): Effect of Mergers on Financial Performance: A Study of Indian Corporate, Indian Journal of Accounting, Vol. XLI (2), pp.18-26

  • Datta, Sudip, Datta M and Kartik Raman (2001): Executive Compensation and Corporate

  • Acquisition Decisions, The Journal of Finance, Vol. 56: No. 6, pp. 2299-2336

  • Gallet, C. A., (1996): “Mergers and Market Power in the U.S. Steel Industry”, Applied Economics Letter, 3, pp. 221-223.

  • Hernon, R and E Lie, (2002): Operating Performance and Methods of Payment in Takeovers, Journal of Financial and Quantitative Analysis, March, pp. 137-156

  • Hogarty Thomas F (1970): The profitability of Corporate Mergers, Journal of Business, Vol. 44, pp.317327

  • Harford Jarrad (1999): Corporate Cash Reserves and Acquisitions, The Journal of Finance, Volume 54: Issue 6, pp. 1969-1997

  • Kar Rabi Narayan (2006): Mergers and Acquisitions ofEnterprises, Indian and Global Experience, New Century Publications, New Delhi

  • King, D., Dalton, D., Daily, C. and Covin J (2004): Meta-Analysis of Post-Acquisition Performance: Identification of Unified Moderators, Strategic Management Journal, February, pp. 187-201

  • Kling, G (2006): The Long-term Impact of Mergers and the Emergence of Merger Waves in pre-World War I Germany, Explorations in Economic History, Vol. 43 (4), pp. 667-688

  • Kroll Mark, Wright Peter, Toombs Leslie AND Leavell Hadley (1995): Formof Control: A Critical Determinant of Acquisition Performance and CEO Rewards, Strategic Management Journal, Vol. 18(2), pp.85-96

  • Kumar, R., (2009): “Post-Merger Corporate Performance: an Indian Perspective”, Management Research News, Vol. 32 (2), pp. 145-157.

  • Kumar and Rajib (2007): Mergers and Corporate Performance in India, An Empirical Study, Decision, Vol. 34, No. 1, pp. 121-147.

  • Megginson, W., A. Morgan and L. Nail (2004): The Determinate of Positive Long-Term Performance in Strategic Mergers: Corporate Focus and Cash, Journal of Banking and Finance, March, pp. 523-552

  • Rau, P. and T. Vermaelen, (1998): “Glamour Value and the Post Acquisition Performance of Acquiring Firms” Journal of Financial Economic, 49, pp. 223-253.

  • Da Silva Rosa et al: Market Return to Acquirers of Substantial Assets, The ICFAI Journal of Mergers and Acquisitions, Vol. II, No.3, pp.16-37

  • Tse, T. and K. Soufani, (2001): “Wealth Effect of Takeovers in Merger Activity Eras: Empirical Evidence from the UK”, International Journal of Economics of Business, Issue 8, pp.365-377.

  • Yook, K. C. (2004): TheMeasurement of Post-Acquisition Performance using EVA, Quarterly Journal of Business and Economics, Summer, pp. 67-84

  • Yuce and Ng (2005): Effects of Private and Public Canadian Mergers, Journal of Administrative Science, June, pp. 111-124




DOI: http://dx.doi.org/10.33516/maj.v54i2.46-52p